Smith's accountant also remembers that liabilities at December 31, year 4 had increased by $ 18,000 from the beginning of the year. Smith's total assets at December 31, year 3 were a. b. c. d. e. $996,000 $981,000 None of the above. B is the correct answer. With the information given, you can solve for liabilities at 12/31/year 3 ($682,500) and then shareholders' equity at 12/31/year 4 ($948,000) and then work backward to find shareholders' equity at 12/31/year 3 ($880,500) and solve for the $1,545,000 of assets at 12/31/year 3. 12/31/year 3 During the year 12/31/year 4 *Net income = Assets stock issued net income* dividends Liabilities $664,500 + increases by $18,000 Shareholders' Equity $60,000 $42,000 (34,500) revenues - expenses or $735,000 - $693,000.